Crude oil has surrendered roughly a third of its value since the Strait of Hormuz conflict pushed it toward $120 a barrel, yet the price Americans pay at the pump has only barely dropped.
West Texas Intermediate – as closely tracked by the United States Oil Fund (NYSE:USO) – fell almost 5% on Monday to about $80 a barrel, a two-month low, after President Donald Trump said the United States and Iran had reached a deal to end their war and reopen the strait.
The national average for regular gasoline sat at $4.07 a gallon on Saturday, according to AAA, down about 15% from its springtime peak.
Why does the pump take so long to follow crude down? It is one of the most studied puzzles in energy economics.
Why Oil Cratered To $80
